ISLAMABAD: The government is set to pay oil marketing companies (OMCs) up to Rs176 per litre under price differential claims (PDCs) in the wake of the decision against fuel price hike in the country, read the Ministry of Energy’s (Petroleum Division) letter addressed to the Oil and Gas Regulatory Authority (Ogra).
The letter, dated March 20, says that the government will pay PDCs to the OMCS from March 21 (today) till March 27, which amounts to around Rs48 billion, with the payment set to be made by the Finance Division via the Ogra.
In this regard, the government will pay a price differential of Rs176.41 per litre on high-speed diesel (HSD) and Rs77.98 per litre on petrol (MS) to the OMCs.
The PDCs will be paid as Prime Minister Shehbaz Sharif, on Friday, announced the government’s decision to keep the petrol and diesel prices unchanged for next week after rejecting a proposal to raise rates on the occasion of Eid ul Fitr.
The prime minister announced this during an address to the nation, delivered on the eve of Eid ul Fitr. The statement comes as the federal government was scheduled to review the fuel prices on March 20.
Previously, on March 13, the government maintained the petroleum prices despite a surge in global oil prices.
Addressing the nation today, PM Shehbaz referred to the global situation in light of the Middle East conflict between Iran, US and Israel leading to the closure of the Strait of Hormuz — which has disrupted the oil shipping routes resulting in hike in global oil price — and said: “Today, the world is facing an extraordinary test. [Mideast] conflict has shaken the global economy as well as peace and stability”.
The premier pointed out that attacks on energy installations in brotherly countries have worsened the crisis. “There is a fear that this crisis may intensify further,” he said.
Highlighting the economic impact, the prime minister said oil prices in the global market have surged sharply. “Oil, which was priced at $72 per barrel just weeks ago, has now reached $158 per barrel,” he stated.
The prime minister warned that the situation could lead to rising inflation.
The prime minister further said that another increase in oil prices had been observed in the week starting today, after which he was advised again to raise petrol by Rs76 per litre and diesel by Rs177 per litre, but he rejected the proposal.
“So, the federal government will bear the additional burden of Rs45bn once again,” the PM added.
He said the federal government had spent Rs69bn from its savings and development budgets over the past two weeks to prevent petrol prices from rising by Rs127 per litre and diesel by Rs252 per litre.
